Finding Beauty in 2022

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Global Recovery
While most of the global beauty markets are experiencing growth versus 2020, very few have reached pre-pandemic 2019 sales levels. If certain markets continue to struggle, it will weigh down the larger global revival. The U.S. and China were two countries that grew in 2021 versus 2019, but each country achieved growth in a different way: the U.S. showed how growth can be fueled by smaller categories, like fragrance and hair; success in China revealed the power of the largest category there — namely skincare. The takeaway here is to pay attention to both large and small areas of the market because they both can impact sales significantly. There are many nuances driving the sales performance in specific countries; recognizing those differences will help to identify the geographic areas and categories you’ll need to prioritize to grow your business.
The Role of Retail
According to the latest data from NPD, brick-and-mortar store sales remain strong, averaging higher spending levels in 2021, compared to both 2020 and 2019. Growth in the online channel has been slowing down, with some weeks posting negative sales performance as the market right-sized itself. In the midst of these shifts, direct-to-consumer sales outpaced both brick-and-mortar and online sales. While these are all macro trends, beauty retailing is following the same trajectory. Beauty also experienced the added layer of channel blending, with the new Ulta-Target and Sephora-Kohl’s partnerships that rolled out this past year. Brands need to develop strategies to capitalize on these structural shifts.

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